Eskom wants tariffs up 66% – and that’s with the dimmer on

By Branko Brkic 8 October 2009

You know those numbers you are too fragile to hear? Well listen up. Eskom wants electricity prices to increase between 45% and 66% this year, with more increases next year and the year after. Two publications have revealed their estimates of Eskom’s next tariff increase applications, following the decision by public enterprises committee chairwoman Vytjie Mentoor who refused to release the information because it could create “public consternation”. This was clearly a red flag to the media bulls, and industrious reporters when out to find the information. Reuters reported it had a leaked copy of the application, and that Eskom was proposing two options - the first an increase from 33c a kilowatt hour to 75c a kilowatt hour. OK, that’s pretty scary, we are consternated now. Eskom’s preferred option, however, was an increase of 22c/kwh a year for three years. That still means a 66% increase every year. And we are still consternated. Eskom argues the increase is necessary to fund its ambitious R385 billion expansion plan. Business Day reported this morning the more likely figure was much lower - a 45% increase a year for three years. But even so, this is a big jump from the 31% increase granted this year which kicked in a few months ago. Eskom has yet to confirm any or all of the numbers. The spokesman told Business Day that Eskom had made a commitment to the South African Local Government Association, the Treasury and National Energy Regulator not to make the contents public.

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